Opel Says Talks With Peugeot Are On Track image

Talks are on track between Opel and PSA Peugeot Citroen to create joint venture.

GM’s Opel and PSA Peugeot Citroen plan to create a joint venture to manufacture four new model series by 2016/2017: two compact cars, a successor to the Opel Zafira family van and a successor for the mid-sized Opel Insignia and Citroen C5.

“The quality of the talks is really very good. And the operational and technical advantages are so great that we will surely will be able to wrap up soon the negotiations on joint vehicle development, ” Thomas Sedran told WirtschaftsWoche.

In February, the two automakers presented an initial alliance agreement, planning to cut costs with more than $2 billion annually within five years. As part of the original deal, GM paid 320 million euro ($419 million) for a 7% in Peugeot. But sources close to the situation said that the two companies halted talks last month due to misgivings regarding Peugeot’s worsening finances and government-backed bailout.

One of the sources said GM and PSA have agreed to a pause in early-stage talks on a Peugeot-Opel deal, as the government bailout is sabotaging the plan. According to another source, the two carmakers believe any deeper tie-up is unlikely before 2014, when the market is expected to recover.